Internet2 Financial Outlook –
Member Dues & Abilene Fees for
2006 and 2007
Laurie Burns, Member & Partner Relations
Internet2
Internet2 Business Meeting
Spring 2005 Internet2 Member Meeting
May 3, 2005
Priority discussions
• Discussions held with Councils during
first quarter of 2005, most extensively
with NPPAC
• Priority rankings different, points to
diversity of interests in community and
importance of balancing what is paid for
by member dues and what from other
sources
2
Financial outlook
• Reserves have been managed to provide
short-term bridging and to minimize impact of
new resource needs on members
• Reserves are maintained to allow
investments in the future, but can't absorb
ongoing operational deficits such as
projection for ’05 and beyond
• Facing a period of increased spending:
• Next generation of Abilene
• Related technology development (e.g., HOPI)
• Ramped up work in security
3
Closing the gap
Magnitude of resource needs requires:
• Exploration of other sources of revenue
• Continued and heightened control of costs,
including reducing activities in some areas
• Examination of sustainable sources of
funding
4
Closing the gap
Exploration of other sources of revenue
• Grant and donations extremely important,
but can be one-time or otherwise limited
• Potential competition with members may
mean Internet2 should not pursue certain
grant opportunities
Cost control critical and will continue
• Internet2 is reallocating $500,000 in 2005
to absorb current year’s work in security
without increasing deficit
5
Sustainable sources of funding
• General Principles
• Sustained sources of funding are crucial to
Internet2's financial health
• Sustained sources of funding allow
Internet2 to remain independent
• Small additional investments by each
member adds up to significant funding for
priority efforts, allows forward progress that
benefits whole community
6
Member dues
• Dues were not changed for first six
years of Internet2’s existence
• Dues have remained flat for last two
years, at $27,000, $10,800, and $2,500
• During the past two years, Internet2
has:
• Reduced expenditures and controlled headcount growth
• Shifted resources to take on new work
• Found grant support for work deemed important to the
community
• Maintained its reserves
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Member dues
• Reduced expenditures
• Health care costs, conference calling, cell phones,
legal support specialization, outsourced travel
• Headcount relatively flat, maintained flexibility in
staff force, voluntary and involuntary attrition
• Shifted resources
• Absorbed earlier phase of security work and rampup of InCommon work with existing staff and
resources
• Reduced staffing for the Commons, digital video
work, and end-to-end performance
8
Member dues
• Found grant support
• Number of funded grants grew from 4 to 10 in past
two years
• 10 of 19 (53%) of submissions were funded,
involving 40 member institutions
• 5 of 10 are sub-awards with a member lead
• Of remaining 5, over 70% of funds were
distributed to member institutions
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Member dues
• Maintained reserves
• Financial model has been to build reserves to
support investments in important projects
• 2002/2003 Abilene upgrade and investment in
NLR are recent examples
10
Abilene primary participation
fees
• Primary Participation fee of $20,000 has
remained constant since launch
• During this time, Abilene has:
• Been through a major upgrade
• Seen major increases in utilization
• Seen major decrease in revenue per
gigabit
• Continued to decrease connection fees
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Abilene revenue 2000-2004
Revenue per Gigabit of Abilene Traffic
$2.50
$2.00
$2.08
$1.50
Dollars per Gigabit
$1.17
$1.00
$0.70
$0.50
$0.62
$0.27
$2000
2001
2002
2003
2004
Year
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Abilene primary participation
fees
• Abilene’s costs aren’t dropping as fast
as revenues per megabit
• Abilene continues to out-perform other
point-to-point lit services
• New work in security and HOPI are
directly relevant to next generation of
Abilene
13
New fees and dues
• Approved by Board of Trustees on April
17
• 2006:
• Dues to $28,500/$11,500/$2,600
• Participation fees to $21,000
• 2007:
• Dues to $30,000/$12,000/$2,700
• Participation fees to $22,000
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